Bitcoin Derivatives Market Falters As Futures Buying Activity Declines Sharply

Bitcoin has displayed robust resilience, bouncing back into bullish territory and allowing the flagship asset to recover to $105,000 once again. While the price is gradually recovering from the recent pullback, BTC’s derivatives market is witnessing a steady drop.

A Drop In Bitcoin Futures Buying Pressure

Despite a notable rebound as Monday drew to a close, Bitcoin’s derivatives market continues to exhibit a downward trend. Darkfost, an on-chain expert and verified author, reported the development in a post on the X (formerly Twitter) platform, which hints at a shift in trader sentiment.

It is important to note that the derivatives market currently has the biggest impact on the price movement of Bitcoin. As a result, Measures such as the Taker Buy/Sell ratio or Net Taker Buy/Sell Volume are crucial on-chain indicators to keep an eye on.

The on-chain expert claims that these metrics aid in the analysis of buying and selling pressure in the market. By analyzing buying and selling pressure, investors and traders might be able to identify the dominant market trend or direction.

After exploring the BTC Net Taker Volume metric, the expert revealed that buying pressure in the futures market is on the downside. When compared to the past month, this current decline in buying pressure is significant.

This sharp drop in demand for leveraged exposure during heightened market whirlwinds suggests that players may be adopting a more cautious position. Furthermore, it can be a sign of increasing skepticism regarding its immediate future, even though the broader fundamentals of Bitcoin remain sound.

As long as the indicator remains in the negative zone, Darkfost stated bearish sentiment is likely to grow, and buying pressure in the futures market will steadily decrease. To put it another way, traders are becoming cautious, and that long-side volume is declining.

In the meantime, the expert has underscored the importance of monitoring the ongoing trend. This is because when this trend reverses, it implies that traders are once again feeling positive, which might lead to upward momentum.

Market Sentiment Still Negative

Offering more insights on market sentiment, Axel Adler Jr., a macro-researcher and author, revealed that the composite Sentiment index has been under bearish pressure for the last 24 hours and has corrected to a local minimum of -20%, which is the highest reading in the last month.

According to the expert, the Taker order volume (seller predominance) negative delta grew more pronounced at the point of breaking through the $100,000 mark. Meanwhile, as open interest dropped, players were compelled to use liquidations to lower their leverage.

Looking at the Bitcoin Advanced Sentiment Index, the metric has increased from 20% to 37%, while the volume delta has decreased, remaining in the bearish mood zone. This development suggests that players are trying to capture the pullback by partially purchasing oversold positions. However, Adler has underlined caution in the market due to the possible escalation of the Middle East conflict.